Public Research Funding Tops €1 Billion for the First Time, but Slips as a Share of GDP

Portugal poured more than €1 billion of public money into research and development in a single year for the first time, a symbolic threshold for a country that has long promised to build its future on science and skills. Figures reported this week show that government funding for R&D topped the billion-euro mark in 2025, and that Portugal posted the third-largest increase in public research spending of any European Union member state.

On the face of it, the milestone is unambiguously good news. Crossing €1 billion places research funding at a level that would have been hard to imagine during the austerity years, when science budgets were among the first casualties of Portugal's bailout. The pace of the increase — third-fastest in the EU — suggests a deliberate political effort to catch up with wealthier northern economies that treat R&D as the engine of long-term growth.

But the headline conceals a more awkward truth. Even as the absolute figure hit a record, research spending as a share of gross domestic product actually fell compared with 2024. In other words, the economy grew faster than the research budget, so science claimed a slightly smaller slice of a larger pie. That distinction matters, because it is the ratio to GDP — not the raw euro total — that economists and the EU use to judge whether a country is truly prioritising innovation.

The gap is long-standing. Over the past decade, Portugal's R&D intensity — the share of national output devoted to research — has remained stubbornly below the European average. The EU has set itself a target of spending 3% of GDP on research, a goal Portugal has yet to approach, and the 2025 dip in intensity shows how easily progress can stall even when nominal spending rises. Reaching a record in euros while slipping in percentage terms captures the central challenge: Portugal is spending more, but not necessarily enough to close the distance with its peers.

Where that money goes shapes the payoff. Public R&D funding flows to universities, state laboratories and research institutes, and increasingly to partnerships with private companies working on everything from renewable energy and biotechnology to software and advanced materials. Sustained investment is what allows Portugal to retain researchers who might otherwise emigrate, to attract international projects, and to turn academic work into the patents, start-ups and skilled jobs that lift productivity over time.

The stakes are high for a country that has struggled to escape low-wage, low-productivity traps. Economists broadly agree that richer, more resilient economies tend to be those that invest heavily and consistently in knowledge. For Portugal, the €1 billion figure is proof that the commitment is real in cash terms — but the falling intensity is a reminder that rivals are not standing still, and that catching up requires spending to grow at least as fast as the wider economy.

The message for policymakers is therefore double-edged. Portugal can fairly claim a record and one of the EU's strongest funding increases; it cannot yet claim to have closed the innovation gap. Whether 2025's billion becomes a floor or a ceiling will depend on choices made in the budgets still to come.